COMPANY NEWS; Weapons Makers Report Rise in Profits for Third Quarter

By ANDREA ADELSON

Published: October 20, 1994

The McDonnell Douglas Corporation, the nation's largest military contractor, posted record earnings of $161 million, or $4.07 a share, compared with $142 million, or $3.62 a share, in the quarter a year earlier.

The company, based in St. Louis, attributed its gains to results from its military aircraft segment, which had an 8 percent increase in revenue. The earnings were a few cents more than what had been expected by industry analysts. McDonnell's stock surged $4.125 a share yesterday, to $127.125, on the New York Stock Exchange.

Most of the contribution to higher profits came from McDonnell's F/A-18 program, a company spokesman said. Six of the $35 million jet fighters were delivered to the Air Force during the period. The controversial C-17 cargo aircraft program, plagued by cost overruns and delays, also turned a profit in the period. Three C-17s, each costing $200 million, were delivered in the period.

The Northrop Grumman Corporation, based in Century City, Calif., said earnings rose 50 percent, to $39 million from $26 million in the quarter a year earlier. The results do not include income from Northrop's two recent acquisitions, the Grumman Corporation and Vought Aircraft.

Without those deals, Northrop said its revenue, which was $1.93 billion in the period, would have fallen 6 percent because of lower revenue from its B-2 bomber program and a 50 percent decline in deliveries of 747 fuselages. Seven fuselages were made this quarter compared with 14 in the year-ago period.

Shares of Northrop fell 25 cents, to $45.75, on the New York Stock Exchange.

The General Dynamics Corporation, based in Falls Church, Va., said it had a 3.8 percent increase in earnings from continuing operations, but net earnings declined 26 percent, to $54 million from $73 million in the quarter a year earlier. Results from the year-ago period were buoyed by a one-time stock sale.

Revenue fell 8 percent in the period largely as a result of a three-week strike in July by members of the United Automobile Workers union at plants in Lima, Ohio, and Sterling Heights, Mich., about a contract dispute, a General Dynamics spokesman said.

Shares of General Dynamics rose 12.5 cents, to $44.125, yesterday on the New York Stock Exchange.